Correlation Between SM Investments and LOBO EV

Can any of the company-specific risk be diversified away by investing in both SM Investments and LOBO EV at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SM Investments and LOBO EV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SM Investments and LOBO EV TECHNOLOGIES, you can compare the effects of market volatilities on SM Investments and LOBO EV and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SM Investments with a short position of LOBO EV. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Investments and LOBO EV.

Diversification Opportunities for SM Investments and LOBO EV

0.11

Correlation Coefficient

SM Investments  LOBO EV

Average diversification

The 3 months correlation between SVTMF and LOBO is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding SM Investments and LOBO EV TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOBO EV TECHNOLOGIES and SM Investments is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SM Investments are associated (or correlated) with LOBO EV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOBO EV TECHNOLOGIES has no effect on the direction of SM Investments i.e., SM Investments and LOBO EV go up and down completely randomly.

Pair Corralation between SM Investments and LOBO EV

Assuming the 90 days horizon SM Investments is expected to generate 0.34 times more return on investment than LOBO EV. However, SM Investments is 2.92 times less risky than LOBO EV. It trades about -0.2 of its potential returns per unit of risk. LOBO EV TECHNOLOGIES is currently generating about -0.15 per unit of risk. If you would invest  1,640  in SM Investments on December 19, 2024 and sell it today you would lose (245.00) from holding SM Investments or give up 14.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	85.0%
Values	Daily Returns

SM Investments  vs.  LOBO EV TECHNOLOGIES

SM Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days SM Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

LOBO EV TECHNOLOGIES

Risk-Adjusted Performance

Very Weak

Over the last 90 days LOBO EV TECHNOLOGIES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental drivers remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with SM Investments and LOBO EV

The main advantage of trading using opposite SM Investments and LOBO EV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Investments position performs unexpectedly, LOBO EV can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in LOBO EV will offset losses from the drop in LOBO EV's long position.

The idea behind SM Investments and LOBO EV TECHNOLOGIES pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.